Abstract

Growth in companies is an important engine of the national economy and a force that maintains well-being in the society. Who determines when and how the company should grow? This study is part of the Platform for Micro Enterprise Growth project funded by European Regional Development Fund (ERDF) and the Council of Northern Ostrobothnia. A micro enterprise is defined as an enterprise employing fewer than 10 employees and whose turnover or balance sheet total is less than two million euros. The aim of this study is to produce new and timely knowledge about the growth factors of companies in Northern Finland.

The survey was targeted at the business leaders of Kainuu, Lapland and Northern Ostrobothnia provinces. The respondents were invited to respond the questionnaire by e-mail from 6 April 2016 to 18 April 2016. The survey was answered by 301 companies, of whom 230 (76.4%) were micro enterprises. There were 143 solo entrepreneurs (62.2%), 57 (24.8%) employing of the enterprises employed 2-4 and 30 (13.0%) of the enterprises employed 5-9 persons.

The company's growth factors were evaluated by the following indicators: entrepreneurial orientation, the impact of the business environment, resource management, and the direct or indirect impact of management's personal attitudes on corporate growth.

On the basis of the results, it is evident that companies should develop their capacity for risk-taking. Even though most companies report their efforts to anticipate competitors' innovations and new products, a minority of companies are ready to invest in technology development. As a result, most of the companies do not even aim to market leadership with their products.

Nearly half of respondents think that the business environment of the company is challenging. In part, this can be explained by price competition, which led to a more aggressive attitude towards competitors. However, over the past three years, less than one third of the companies had invested in research and development activities. Despite the fact that about one-third of respondents anticipate a decline in demand.

Based on the responses, many professional networks have not been able to provide sup-port for decision making. In addition, very few micro-enterprises are outsourcing entrepreneurs to support the company's development.

In this study, businesses are seeking 43% growth in domestic business, 14% growth in exports and 35% in staff growth. Growth opportunities are further undermined by the fact that, according to the responses, companies are carefully exploring opportunities offered by new business opportunities.

The entrepreneur is facing a major challenge as a result of the growth in net sales. On the other hand, entrepreneurs are of the opinion that the growth in net sales gives us better opportunities to invest in steering, control and and management of the company. Correspondingly, the growth in turnover was particularly important for the company development so that the turnover and the value of the company could develop faster than their competitors could.